Business travel

Hotel rates

Moscow still the dearest

ROOM RATES in Moscow have plunged recently, but it still remains, on average, the most expensive city in the world to stay the night. Hogg Robinson Group (HRG), a British company providing corporate travel services, has produced a report that compares average rates for the first six months of 2010 with those for the first six months of 2009. It shows how hotel markets around the world have adapted to changing economic realities. While most cities in Europe are generally more expensive than they were a year ago, and those in America roughly similar in price, in the Middle East and Russia room rates have fallen steeply.

Of the ten most expensive cities in the world, three showed a drop in their average hotel rates (in local currency) of 4% or more, three showed a rise of 5% or more. And the other four showed rises of 0%-3%. The rising rates in places like Stockholm and Hong Kong can probably be attributed to returning business travellers, who are staying more often and for longer than a year ago. But they would be higher, says Margaret Bowler, Director of Global Hotel Relations at HRG, were it not for the very hard deals that many corporate clients negotiated with the hotel chains during the downturn in 2009.

At the other end of the scale, rates dropped 25% in Abu Dhabi owing to chronic over-supply, as a glut of new hotels coincided with falling demand. Dubai and cities in Bahrain, Oman and Qatar, faced similar problems, and all saw hotel rates drop more than 10%.

The volatility is not coming to an end, according to Mrs Bowler. Demand is still below pre-crisis levels, and with governments increasingly looking to cut budgets, public-sector hotel spending could be compromised. And that means another knock-on effect on room rates.